Dredging Corporation of India logged up solid gains on Monday as Q4 net profit soared 53%, even though taxation exemption had a major hand here.

The scrip of the docks and ports dredger spurted 5.9% to Rs 260 on BSE around mid-miorning. The scrip hit a high of Rs 285 earlier. A total of 874 Dredging Corporation shares were traded on BSE in an hour's trading.

DCI has been moving in a Rs 220-260 band in recent months. It is a thinly traded stock, with average daily volumes of 2,355 shares on BSE over the past year.

For Q4 ended 31 March 2003, DCI's net profit leaped up 53% to Rs 56.64 crore compared to a net profit of Rs 36.98 crore for the quarter ended 31 March 2002. The surge in Q4 net profit was mainly due to zero provision for current tax in the current Q4 compared to a provision for taxation of Rs 21.30 crore in the corresponding period last year. The company said it did not make provision for current tax considering benefit under section 33 AC of the Income Tax Act.

For Q4, total income was flat at Rs 158.69 crore (Rs 1.58 billion) compared to Rs 158.44 crore (Rs 1.58 billion) in the corresponding period last year.

For full year FY 2002-03, net profit surged 50% to Rs 152.99 crore (Rs 1.52 billion) from Rs 101.56 crore (Rs 1.01 billion).

Dredging is a service industry. DCI is engaged in executing capital and maintenance dredging for ports and also in maintaining the required depths at ports for safe and economic navigation of ships and other crafts. Its services have been extended to naval establishments, shipyards, industrial establishments etc. in respect of maintenance dredging and land reclamation.

The company executed its first overseas dredging assignment at Taichung Harbour, Taiwan, deploying its 7400 cu.m. capacity TSD DCI Dredge XVI from September 2001 to April 2002.

Being the biggest dredging company in the country and seventh largest in the world, with technically advanced dredgers and experienced fleet personnel, besides acquaintance with Indian conditions, government policy, maritime laws of the land etc., has enabled DCI to take advantage of a near monopoly untill recently.

Rapid changes are taking place in business and trade with the opening up of the economy for international participation. The company is suddenly exposed to international competition. While the company is facing threats of international competition, shift in industry-related protection, regulations and changing customer profile and their preferences, it enjoys the strength of PSE status, established relations with ports and customers, acquaintance with the port conditions. Nevertheless, it has to improve and strengthen in the areas of technology, project management, vessel maintenance management and marketing.